Job Support Scheme - as updated
29th of October, 2020Job Support Scheme
This is a further update on the new rules in place for the end of the Furlough scheme, which finishes on Sunday.
The Job Support Scheme will replace the Furlough Scheme from 1 November and the terms have been improved.
The scheme will run until 30 April 2021 – so for six months.
The scheme will still require employers to contribute with a payment to the employee for hours the employee does not work and if there is no work available at all, the employer/employee will not be able to benefit.
Employees must be advised in writing, that they are being put on to short time working.
As it is a new scheme, it is not relevant whether or not employees were previously furloughed.
The conditions of the scheme are:
- The employees must have been on payroll (ie had an RTI submission made), on or before 23 September 2020.
- The employees can cycle in and out of the scheme, but only for blocks of at least 7 days.
- The employees must actually work and be paid full rates for 20% of their normal working hours.
- For normal “unworked” hours, the government will pay 61.67% up to £1,541.75 per month
- The employer MUST then pay 5% of the normal “unworked” hours up to a cap of £125 per month.
- The employee will therefore receive at least 73% of their normal wages.
The method of calculation of “normal” wages for individuals on variable wages is to be the same as was in place for the Furlough scheme, but HMRC are to release further guidance in this area.
There is therefore a cost to the employer of using the scheme – but it is now only 5% of the unworked wages, so if hours do need to reduce, employers may consider this to be a cost worth incurring in order to preserve jobs and avoid redundancy costs.
If a claim is being made for an employee however, they cannot also be on notice of redundancy and they cannot be made redundant during the period of the claim.
Employers will still need to cover the full cost of Employer’s National Insurance and pension contributions as the Government is not helping with these.
As with the furlough scheme, the employer will need to pay the employees in the first instance and then we can claim reimbursement through our Agent's HMRC portal.
